MTN, Africa’s largest mobile network, is closing in on listing its shares on the Nigerian Stock Exchange.
With a set target of launching its initial public offering (IPO) in 2017, subject to market conditions, the South African company has met with officials of Securities and Exchange Commission (SEC), Nigeria’s securities regulator, Reuters reports.
The meeting, according to Mounir Gwarzo, SEC director general, was to discuss the IPO and the structure of the share sales. MTN could issue three different share classes targeting various investor groups although the company is yet to submit a formal application to the SEC, Gwarzo says.
MTN’s possible IPO in Nigeria is part of an agreement with the government to settle a protracted sim card dispute. In addition to paying a reduced fine of $1.7 billion (the fine was initially set at $5.1 billion), MTN also said it would “take immediate steps to ensure listing of its shares on the Nigerian Stock Exchange as soon as is commercially and legally possible.” Nigeria’s stock market closed last week with a market cap value of $27.6 billion (pdf), almost double of MTN’s $15.5 billion market cap on the Johannesburg stock exchange.
A listing on the local stock exchange could ease strong sentiments from Nigerian government insiders who feel South Africa’s MTN has made profits at the expense of ordinary Nigerians, even though the company has paid billions of dollars in taxes and levies in its 15 years of operations in Nigeria. That sentiment likely underlined a recent claim by federal lawmakers who accused MTN of ”illegally repatriating” $14 billion of its profits, a claim the company has denied.
MTN’s listing could also be a boost for the Nigerian stock exchange which has steadily lost value this year. But the signs came early: within the first two weeks of 2016, the market lost nearly as much value as it did in 2015, falling to a three year low.